Tuesday, May 05, 2015

The Big Wink at Bad Behavior

A massive Medicare and Medicaid fraud was settled last night for $500 million. This is the second settlement for DaVita in a year -- they were previously nailed for $400 million in Medicare and Medicaid fraud, and it's still not over as the bad actors are being left in place at the top of the company.

As I noted in an earlier post, entitled Cheese and Choke Chains, changing corporate behavior is all about incentivizing the right good actors, and penalizing the right bad actors.

You know what doesn't work?

What doesn't work is levying a penalty 10 years too late, and levying the penalty on the stock holders who did not do the fraud, while letting everyone in the company who planned the fraud, and winked at the fraud while it was going on, keep their jobs, their promotions, their bonuses, their stock options, and their beach houses.

Imagine if we tried to train dogs that way -- by letting them jump on the table to steal the roast, then waiting two weeks to punish them, and then when a punishment is inflicted, we levy it by kicking the neighbor's cat.

Crazy?  No crazier than what we are doing when it comes to corporate crime.


1 comment:

jeff hays said...

Certainly not the only example of this magnitude, and the numbers involved would be a down payment on a Canadian style single payer health system.
SO the Obama administration hires 16,000 new IRS agents to harass and intimidate folks into buying private insurance, when we could have a single payer system and use the 16,000 government goons to harass and intimidate crooks and cheaters like the above.
I BELIEVE we could actually SAVE money with single payer if done right.